The federal judge in the tax shelter case against former KPMG executives dismissed the charges against 13 of the defendants. In a 64-page opinion, Judge Lewis Kaplan wrote that he had “reached this conclusion only after pursuing every alternative short of dismissal and only with the greatest reluctance.” A little over a year ago, Kaplan issued a stunning indictment of the conduct of the federal prosecutors in the case. He found that the prosecutors had violated the due process rights of the accused by pressuring KPMG not to pay for the legal defense of its employees. "Those who commit crimes - regardless of whether they wear white or blue collars - must be brought to justice. The government, however, has let its zeal get in the way of its judgment. It has violated the Constitution it is sworn to defend," Kaplan said in his written opinion last June. Charges against three KPMG defendants—Robert Pfaff, John Larson and David Greenberg, all former senior tax advisers at KPMG—still stand, as do the charges against a lawyer and an investment adviser who were not employed by KPMG. The judge said Pfaff, Larson and Greenberg had not proven that KPMG would have paid their defense costs. The lawyer and the investment adviser were outside advisers not KPMG employees at the time, and so KPMG would not have paid for their defense in any case. The case arose out of the accounting scandals of the late nineties. The defendants were accused of creating tax shelters that allowed clients to avoid billions of dollars in taxes. Because the case has been sullied by prosecutorial misconduct, no legal judgment has ever been rendered on the legality of the shelters. In a strange twist, last month the prosecutors requested a dismissal of the case. It is widely believed that the prosecutors sought the dismissal so that they could appeal Kaplan’s earlier rulings against the high-pressure tactics they had employed against the defendants and KPMG. As the New York Times puts it: “Prosecutors, in court filings a couple of weeks ago, had essentially dared Judge Kaplan to do what he did today. At the time, the move was seen as an effort by prosecutors to get the case moving again.”Charges Dropped in KPMG Tax Case [New York Times]Judge Dismisses Charges Against 13 in KPMG Case [Wall Street Journal]